Tenney Engineering, Inc. v. United Electrical Radio & MacHine Workers of America, (u.e.) Local 437

McLAUGHLIN, Circuit Judge (dissenting).

Although the legislative history of the Arbitration Act is admittedly not helpful in directly determining what scope Congress intended to give the phrase “workers engaged in foreign or interstate commerce” as found in Section 1, it does show that the statute was enacted to provide solely for arbitration in commercial disputes. As the majority notes, the bill from which the Act emerged was originally drafted by the Committee on Commerce, Trade and Commercial Law of the American Bar Association. Mr. Piatt, the chairman of this committee, in testifying before the Senate subcommittee which considered the bill said, “It was not the intention of the bill to make an industrial arbitration in any sense.” 16 (Emphasis supplied.) Discussion of the bill on the floor of Congress also indicates this purpose. 17

It was not until about ten years ago that the statute was used to compel arbitration in labor cases involving collective bargaining contracts. 18 In Donahue v. Susquehanna Collieries Co., 3 Cir., 1943, 138 F.2d 3 , this court had before it an appeal from a district court decision denying defendant-employer’s application for the stay of a suit brought under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., pending arbitration pursuant to a collective bargaining contract. We reversed, holding that Section 3 of the Arbitration Act is not limited to those arbitration agreements set *456 out in Section 2, including contracts evidencing transactions involving commerce, as appellee had urged.

We followed the Donahue opinion in Watkins v. Hudson Coal Co., 3 Cir., 1945, 151 F.2d 311 , certiorari denied 327 U.S. 777 , 66 S.Ct. 522 , 90 L.Ed. 1005 , where we affirmed an order entered under the authority of the Arbitration Act staying a Fair Labor Standards Act case brought by employees of another coal company. We there reiterated our conclusion that Section 3 is independent of Section 2, having meanwhile found support in a Fourth Circuit case which accepted Donahue. 19 We added, over the dissent of one of the panel, that Section 1 affects only the definition of commerce and is not a limitation on the entire Act, i. e., we reasoned that if a case was within Section 3 it did not have to depend upon Section 2, therefore any restriction in Section 1 relating to interstate commerce could not affect the ease. This conclusion was in conflict with the Sixth Circuit in Gatliff Coal Co. v. Cox, 1944, 142 F.2d 876 . Two later decisions of our court, Donahue v. Susquehanna Collieries Co., 3 Cir., 1947, 160 F.2d 661 , and Evans v. Hudson Coal Co., 3 Cir., 1948, 165 F.2d 970 , are consistent with the first Donahue appeal and the Watkins decision.

In Amalgamated Ass’n, etc. v. Pennsylvania Greyhound Lines, 3 Cir., 1951, 192 F.2d 310 , however, we abandoned our earlier position and held that Section 1 pervades the entire Arbitration Act. 20 We therefore affirmed the district court’s order dismissing an fiction brought by a union to compel arbitration under the terms of a collective bargaining agreement. 21 That litigation as well as the second Greyhound suit, Pennsylvania Greyhound Lines v. Amalgamated Ass’n, etc., 3 Cir., 1952, 193 F.2d 327 , in which we also disallowed compulsory arbitration of a collective bargaining agreement, 22 presented no possible question of interstate commerce, the union members being employed by an interstate bus line. Prior to those actions, however, we had decided the four coal cases, in which the employees, as here, were engaged in the production of goods for shipment in interstate commerce, without once suggesting that the labor contracts there involved were not those of employees engaged in interstate commerce. Admittedly such a decision was not necessary under the view we then took of Section 1, but after the first Donahue case when, the Gatliff Coal decision of the Sixth Circuit had challenged our interpretation of Section 1, it would seem that if the majority view in the instant case was sound law then we would have allowed compulsory arbitration by simply holding that the employees were not engaged jn interstate commerce. Instead, Watkins and the other two coal cases continued to follow the reasoning of Donahue and because of it permitted compulsory arbitration. In effect those cases have been repudiated, but by the device of restricting the concept of interstate commerce we have completed the circle and are back where we started.

The view that there can be no compulsory arbitration under this Act of collective bargaining agreements of employees similarly situated to appellants finds solid support in the three other circuits which have considered the question. The Sixth Circuit Gatliff Coal case, supra, unlike our own coal cases, held that Section 1 was a limitation on *457 the whole Act. Cox, the plaintiff, who was employed in defendant’s power house, brought suit to recover wages due him under a collective bargaining agreement. Defendant moved to stay the proceedings pending arbitration. The denial of that motion was affirmed on appeal, the court holding that the agreement was within the exception of Section 1. Implicit in that decision and necessary to the holding is the determination that the contract was that of an employee engaged in interstate commerce.

International Union v. Colonial Hardwood Flooring Co., 4 Cir., 1948, 168 F. 2d 33 , a case very similar to the instant one, was a suit by an employer under the Labor Management Relations Act of 1947, 29 U.S.C.A. § 185 et seq., to recover damages on account of a strike. The Fourth Circuit affirmed the denial of the defendant union’s motion to stay the proceedings so that there could be arbitration pursuant to the Arbitration Act, the court holding that the collective bargaining agreement was within the exclusionary clause of Section 1. The members of the defendant union were employed in plaintiffs woodworking establishment in the city of Hagerstown, Md. 23 There again the implicit holding is that the employees were engaged in interstate commerce within the Arbitration Act. The court said at 168 F.2d 36 :

“It is perfectly clear, we think, that it was the intention of Congress to exclude contracts of employment from the operation of all of these provisions [Sections 2, 3 and 4 of the Act]. Congress was steering clear of compulsory arbitration of labor disputes * * *.” 24

In Mercury Oil Refining Co. v. Oil Workers International Union, 10 Cir., 1951, 187 F.2d 980 , the labor organization brought an action to enforce an arbitration award made under the terms of its collective bargaining agreement. The district court invalidated the award and ordered further arbitration. Both parties appealed. The Tenth Circuit reversed that part of the judgment directing additional arbitration on the ground that labor contracts are specifically excluded from the Arbitration Act. There is nothing to indicate that the oil workers affected were engaged in the transportation industry.

In addition to the above mentioned decisions there is a district court opinion in our circuit on all fours with the instant proceedings, Ludlow Mfg. & Sales Co. v. Textile Workers Union, D.C.Del. 1952, 108 F.Supp. 45 . That case was an action by an employer against a union under the Labor Management Relations Act for damages as a result of the violation by defendant of a no strike clause in a collective bargaining agreement. Judge Rodney in the district court, relying on this court’s two Greyhound decisions, denied defendant’s motion for a stay of proceedings pending arbitration on the ground that the Arbitration Act did not require compulsory arbitration of labor contracts.

Opposed to these views there is not a single decision delimiting the phrase “contracts of employment of * * * workers engaged in foreign or interstate commerce” as the majority has here done. 25

*458 We are told by the majority that the exclusionary clause was intended by the draftsmen of the Act to embrace two groups of transportation workers, seamen and railroad employees, as to which special arbitration legislation already existed “and they [the draftsmen] rounded out the exclusionary clause by excluding all other similar classes of workers.” The sole reason advanced for this attempted construction is the statement that the rule of ejusdem generis controls. Since the intention of Congress manifestly was to confine the Act to' commercial disputes, ejusdem generis has no possible relevancy here. As said in Gooch v. United States, 297 U.S. 124, 128 , 56 S.Ct. 395, 397 , 80 L.Ed. 522 , “ * * * it [the rule of ejusdem generis] may not be used to defeat the obvious purpose of legislation.” See also S. E. C. v. C. M. Joiner Leasing Corporation, 320 U.S. 344, 350, 351 , 64 S.Ct. 120 , 88 L.Ed. 88 ; Cf. Smith v. Davis, 323 U.S. 111, 117 , 65 S.Ct. 157 , 89 L.Ed. 107 and Fitch Co. v. United States, 323 U.S. 582, 585, 586 , 65 S.Ct. 409 , 89 L.Ed. 472 , where the rule was applied because not in conflict with the general purpose of the statute. It should be noted that if only classes of workers as to which arbitration procedure existed were intended by Congress to be excluded from the Arbitration Act it would have been a simple task to have so worded the Act. Similarly, if transportation workers alone were to have been excluded Congress could have used more appropriate language to indicate such intention.

We would come closer to effecting Congressional intent if we gave proper emphasis to the words “contracts of employment” rather than narrowly construed the phrase “workers engaged in * * * interstate commerce” in the exclusionary clause. To suggest that the 1925 concept of interstate commerce should restrict the exclusionary language of the Act in 1953 is unrealistic for three reasons. In the first place, Congress was not restricted in 1925 to excluding only employment contracts of workers engaged in the “direct channels” of interstate commerce — it could have provided that no employment contracts, whether they involved interstate or intrastate labor, would be subjected to compulsory arbitration in the federal courts. Second, even if it be agreed, as it must be, that the concept of interstate commerce was much narrower then than now, we need not now be bound by the older view. An analogous situation would be the case of an old statute requiring that something be done according to due process of law. Would anyone argue that in interpreting such a statute today we would be limited to a consideration of what constituted due process at the time the legislation was enacted, despite the fact that our concept of that term had greatly changed in *459 the interim? In my opinion the law is not so inflexible. Third, although the statute was originally enacted in 1925, it was reenacted and codified as Title 9 of the U.S.Code in 1947. It was because of the change in the catch line of Section 1 at that time that we held in the first Pennsylvania Greyhound case, supra, that the section applied to the whole Act. Therefore the broader view of interstate commerce as it was understood in 1947 rather than the relatively narrow view extant in 1925 should be our present guide in interpreting Section 1.

For the reasons stated I would affirm.

STALEY, Circuit Judge, joins in this dissent.

. Hearing before Subcommittee of Committee on the Judiciary, United States Senate, on S. 4214, 67th Cong., 4th Sess., p. 9 (1923).

In 65 Harv.L.Rev. 1239 (1952), a discussion of Amalgamated Ass’n, etc. v. Pennsylvania Greyhound Lines, 3 Cir., 1951, 192 F.2d 310 , infra, it is said:

“The decision on this point [that the exclusionary language of Sec. 1 of the Arbitration Act is a limitation on the entire Act] and the holding that a collective bargaining agreement is a ‘contract of employment’ are supported by the statutory history which indicates that the Act was intended to apply only to commercial contracts and not to labor disputes. See Hearings before Subcommittee of Committee on the Judiciary on S. 4214, 67th Cong., 4th Sess. 9 (1923). The exception was added at the request of the president of a union which operated under collective agreements containing arbitration provisions. See Proceedings of the 24th Ann. Convention of the Int’l Seamen’s Union 186 (1921).” (Emphasis supplied).

. See, for example, 65 Cong.Record 984, 1931 and 11,080, 68th Cong., 2nd Sess. (1924).

. In American Guaranty Co. v. Caldwell, 9 Cir., 1934, 72 F.2d 209 , it was used in the case of a dispute between a general agent and his corporate employer concerning a contract entered into between the parties. No collective bargaining agreement was involved.

. See 65 Harv.L.Rev. 1239 (1952).

. By this time it had been established that a collective bargaining agreement is a contract of employment within Section 1. Mercury Oil Refining Co. v. Oil Workers International Union, 10 Cir., 1951, 187 F.2d 980 ; International Union v. Colonial Hardwood Mooring Co., 4 Cir., 1948, 168 F.2d 33 ; Gatliff Coal Co. v. Cox, 6 Cir., 1944, 142 F.2d 876 . Amalgamated Ass’n, etc. v. Pennsylvania Greyhound Lines, 3 Cir., 1951, 192 F.2d 310 , expressly so held.

. In the first case it was the union which sought to enforce arbitration, in the second, the employer.

. See the district court opinion, D.C.D. Md.1948, 76 F.Supp. 493 .

. Similar language was used by this court in the first Greyhound case, 3 Cir., 192 F.2d 310 , 313:

“For Congress to have included in the Arbitral ion Act judicial intervention in the arbitration of disputes about collective bargaining involving these two classes would have created pointless friction in an already sensitive area as well as wasteful duplication. It is reasonable, therefore, to believe that the avoidance of an undesirable consequence in the field of collective bargaining was a principal purpose of excepting contracts nf employment from the Act.” (Emphasis supplied).

. In Shirley-Herman Co. v. International Hod Carriers, etc., 2 Cir., 1950, 182 F.2d 806, 808 , an action by a contractor-employer for damages arising from art allegedly illegal work stoppage on the part of the defendant union, which was en *458 gaged in furnishing men for contracting work in the Buffalo area, the Second Circuit affirmed a judgment for plaintiff. After holding that the dispute was in an “industry affecting commerce” within the Labor Management Relations Act, under which the suit was brought, and that defendant must respond in damages for failure to arbitrate as required by the collective bargaining agreement, the court said at 182 F.2d 809 :

“Defendant further contends that the arbitration provisions of the contract are illegal and unenforceable, on the ground that contracts of employment in interstate commerce are excluded in § 1 of the United States Arbitration Act, 9 U.S.C.A. § 1 , and also because such a provision as that contained in the contract here deprives workers of their right to strike. But the exclusion from the Arbitration Act does not prevent such employees as these from agreeing contractually to arbitration.”

There are other cases, not otherwise pertinent here, in which the courts have failed to avail themselves of the narrow construction urged by the majority. See, for example, Lewittes & Sons v. United Furniture Workers of America, D.C.S.D. N.Y.1951, 95 F.Supp. 851 , and United Office & Professional Workers of America v. Monumental Life Ins. Co., D.C. E.D.Pa.1950, 88 F.Supp. 602 . While the exact duties of the employees there concerned are not made clear in the opinions, the titles of the unions very strongly suggest that they were not directly engaged in the channels of interstate commerce.